Published: Thu, June 07, 2018
Business | By Eloise Houston

Biotech Merger: Bayer Set To Close Monsanto Takeover On Thursday

Biotech Merger: Bayer Set To Close Monsanto Takeover On Thursday

The German pharmaceutical company Bayer has been in the process of buying the company for more than two years, and the $66 billion deal is finally closing this week.

Accordingly, Bayer will remain the name of the merged entity, with Monsanto's name fading away. The products of the USA agrochemical company will instead become fully-integrated into Bayer's own portfolio from a marketing perspective.

Bayer plans to complete its acquisition of Monsanto this Thursday, June 7. Under U.S. antitrust regulations, the formal integration of Monsanto into the corporate structure of Bayer could only commence once the Bayer-BASF deal was complete.

Bayer launched a 6 billion euros ($7 billion) rights issue on Sunday, a cornerstone of the financing package for its planned $62.5 billion takeover of seeds maker Monsanto.

That means there will be less overlap and fewer savings when Bayer assumes the USA firm's product range of genetically-modified seeds and compatible pesticides.

"The acquisition of Monsanto is a strategic milestone in strengthening our portfolio of leading businesses in health and nutrition", said Werner Baumann, chairman of the board of management of Bayer AG. NFU officials are concerned about the impact the deal will have on the farmer by consolidating more than a quarter of the world's seed and pesticides market into one company.

But Bayer executives insisted that Monsanto practices rejected by environmentalists, including genetic modification of seeds and deployment of "crop protection" technologies like pesticides, were vital to help feed a growing world population.

Stating that the acquisition is anticipated to generate significant value, Bayer said it expects a positive contribution to core earnings per share starting in 2019. From 2021 onward, the contribution is expected to be double-digit percentage. After Bayer acquires Monsanto, "suddenly, the leading seller of GMOs [will] be European, rather than American", Charles writes. "We will listen to our critics and work together where we find common ground", Baumann said. We have to talk to each other.

"It's understandable that Bayer wants to avoid having bought Monsanto's negative image with the billions it has spent on the firm", said Greenpeace campaigner Dirk Zimmermann, urging "a fundamental transformation in the new mega-company's policies". "It's the only way to build bridges".

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